Key points of investment
The decline in module prices stimulated installed demand. In 2023, the leading PV stent company achieved operating income of 6.39 billion yuan, an increase of 72.59% year on year, net profit of 345 million yuan, up 676.58% year on year, a gross profit margin of 18.11%, an increase of 5.67 pct year on year, and a net profit margin of 5.41%, an increase of 4.18 pct year on year. As the prices of products such as upstream modules in the photovoltaic industry chain continued to decline, the company's desire to build centralized ground power plants increased, and the company's photovoltaic stent business grew. In the fourth quarter of 2023, the company achieved operating income of 2,997 billion yuan, a year-on-year increase of 107.58%, a month-on-month increase of 103.74%, net profit of 188 million yuan, a year-on-year increase of 229.31%, a year-on-month increase of 216.39%, a gross profit margin of 19.89%, an increase of 2.5 pct month-on-month, and a net profit increase of 6.33% and 2.25 pcts month-on-month.
In the first quarter of 2024, the company achieved operating income of 1,814 billion yuan, a year-on-year increase of 122.47%, and net profit of 154 million yuan, an increase of 297.18% over the previous year, a gross profit margin of 20.79%, an increase of 0.9 pct over the previous month, a net profit margin of 8.08%, and an increase of 1.75 pct over the previous month.
There are plenty of orders in hand, and the PV bracket business is growing thin
As of March 31, 2024, the company's on-hand orders were about 6.8 billion yuan (5.9 billion yuan for tracking bracket+800 million yuan for other businesses), showing a rapid growth trend. According to the company's 2023 annual report data, the company had orders of 4.7 billion yuan by the end of 2023 (3.6 billion yuan for tracking bracket+1 billion yuan for fixed bracket+100 million yuan for other businesses). Demand for orders was strong in the first quarter. Led by the dual growth rate of the domestic and foreign photovoltaic industry, 2023-2024Q1 continued to innovate in R&D technology Continued efforts have been made in building a global marketing network, etc., to achieve business growth and improved profitability.
Deepen the global sales network layout and strengthen the global supply chain through multiple channels in 2023. The company will continue to deepen the global sales network layout and seize major overseas photovoltaic markets. In terms of developing key overseas markets, in 2023, the company achieved rapid business growth in PV markets in key overseas regions such as the Middle East, Central Asia, Latin America, and India (1 GW in Uzbekistan, 500 MW in “Sherabad”, 240 MW in “Tashkent”, etc.). In terms of overseas supply chain construction, in 2023, the company plans to gradually invest and build production capacity to meet localization requirements in the Middle East, Latin America and other places based on the original domestic and foreign production bases and the established global supply chain.
Profit forecasting
The profit forecast was raised and the “increase in holdings” rating was maintained. The company is a leading photovoltaic stent company. The global industrial layout is accelerating, and there are plenty of orders in hand. We raised the company's profit forecast for 2024-2025 and added a profit forecast for 2026. The company's net profit for 2024-2026 is 7.05, 8.99, and 11.34 billion yuan, respectively. The corresponding EPS is 5.19, 6.62, and 8.35 yuan, respectively, and the corresponding PE is 20, 16, and 13 times, respectively.
Risk warning: Increased enterprise competition due to industry expansion; risk of fluctuations in raw material prices; international trade environment risk; exchange rate risk.